Question for PWKH (1 Viewer)

[Sky Blues]

The first part of this post is a question for PWKH. The second part is a general 'throwing it out there' question for general discussion.

I understand from this article http://www.catererandhotelkeeper.co...5m-deal-at-coventry-city-fc-s-ricoh-arena.htm (hat tip @davidTrussler) that the Compass contract runs until 2019. Once that deal has expired would Coventry City be able to get the food and beverage revenues back?

If so, could we be in a crazy situation where CCFC moves into a new stadium in, say, 2018* and just a year later Sisu's so-called stumbling block that is preventing a rental agreement would come to an end? And in the meantime the Sisu takes a hit to its income for the intervening three to five years...


(*of course this assumes Sisu's stadium plans are genuine)

 

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[BrisbaneBronco]

Another question
What happens to said contract if there is no CCFC at the Ricoh

 

[oldskyblue58]

Think you will find the set up has changed since then SB. The stadium day to day operation is run by IEC which is jointly owned by ACL and Compass. Compass will provide staff etc to that company i believe. Not sure it is on the same basis as what was agreed in 2009 (the date of the article) But I am sure PWKH would clarify

 

[Sky Blues]

Think you will find the set up has changed since then SB. The stadium day to day operation is run by IEC which is jointly owned by ACL and Compass. Compass will provide staff etc to that company i believe. Not sure it is on the same basis as what was agreed in 2009 (the date of the article) But I am sure PWKH would clarify

Thanks OSB. I'd still be interested to know if there is a potentially daft scenario whereby the supposed block on a deal could be out of the way within a year or two of the club returning from Northampton. If so, doesn't it just reinforce the madness of this who idea? All that lost income from lost fans just to get into a situation that could potentially be achieved a year or two later without that income hit...

 

[PWKH]

I am not surprised by the confusion. Fisher said in the fan's forum in early June that "Compass actually own all the food, beverages and catering. They pay four million pounds for the rights to actually own that business" and "ACL don’t own the food catering company". The fact, as OSB has suggested, is that there is a joint venture company that has the rights to the food and beverage, the conferencing and exhibitions and the hotel. That company, IECE Ltd is owned by ACL 77% and Compass 23%. Originally ACL just contracted Compass to carry out the business but as at Twickenham and other successful places Compass wanted to invest in the business, to commit to it and not to be just a contractor.
Stuart Linnell has repeated the Fisher version on the BBC and so a myth grows.

Anybody buying ACL, or a part of ACL then owns either the whole of the ACL share of IECE Ltd or benefits from their part ownership of ACL.

I hope that this answers your question.

 

[SonOfSnoz]

Also, could PWKH confirm that touchline board advertising revenue goes to Acl, as I always thought Paul Fletcher had set up the deal so as ccfc benefited on that?
Can anyone blame the owners wanting to get full income from match revenue?
Surely that can only be a good thing, as it means we can get more quality on the pitch!

 

[Sky Blues]

I am not surprised by the confusion. Fisher said in the fan's forum in early June that "Compass actually own all the food, beverages and catering. They pay four million pounds for the rights to actually own that business" and "ACL don’t own the food catering company". The fact, as OSB has suggested, is that there is a joint venture company that has the rights to the food and beverage, the conferencing and exhibitions and the hotel. That company, IECE Ltd is owned by ACL 77% and Compass 23%. Originally ACL just contracted Compass to carry out the business but as at Twickenham and other successful places Compass wanted to invest in the business, to commit to it and not to be just a contractor.
Stuart Linnell has repeated the Fisher version on the BBC and so a myth grows.

Anybody buying ACL, or a part of ACL then owns either the whole of the ACL share of IECE Ltd or benefits from their part ownership of ACL.

I hope that this answers your question.

Thank you. Would that arrangement have a time limit on it?
In the meantime, and your answer suggests the IECE arrangement is a long-term one, the club would be able to gain access to 77 per cent of the revenue if it could buy ACL. Given that percentage of ownership, that would surely give the organisation owning that 77 per cent a significant say over how IECE is run and could push for changes if they thought it could be made "to sweat", to use Mr Fisher's phrase. Or that organisation could have a discussion with Compass about gaining full control I guess.

 

[dongonzalos]

So all these shenanigans are apparently over 23% of food and beverages from a 10k crowd. Many of whom won't buy anything.
Anyone smell a fish?

 

[mattylad]

Also, could PWKH confirm that touchline board advertising revenue goes to Acl, as I always thought Paul Fletcher had set up the deal so as ccfc benefited on that?
Can anyone blame the owners wanting to get full income from match revenue?
Surely that can only be a good thing, as it means we can get more quality on the pitch!

If I remember correct pitchside goes to one side and those in the stand to another.

 

[olderskyblue]

But didn't Fisher state in the forums that the profit made wasn't high enough? They only make 20% whereas he would want 40%. So, it's the profit, not the revenue that's important, isn't it? or is it?...... or was that just bluster? Wait, no, he doesn't bluster does he?

 

[PWKH]

Pitch side advertising: all owned by CCFC except for six boards.

The MD of IECE is from ACL and as the majority shareholder, ACL has effective control. One of the reasons for the jv was to "sweat" the assets more efficiently. However that is in a context where the Ricoh site is one of the most profitable of all the Compass sites in Sport and Leisure. There is great ambition from both ACL and Compass to generate greater profit and to continue to expand the business.

 

[Sky Blues]

Thank you for taking the time to respond to my questions PWKH.

 

[Dhinsa's_Millions]

PWKH,

Have you been contacted by Gary Hoffman regarding his offer that has been in the press - do you have any personal views on this? I'm massively in favour of anything that will get us back to the Ricoh although I appreciate its highly unlikely given the entrenched positions.

 

[PWKH]

I should have added: match day revenues are not sufficient to make any real difference to the gap between the other commercial incomes of the Club and the wages. In order to have a self-sufficient club which does not rely on pulling in money every years as loans or investments or whatever it needs to have 365 days a year income. That was the business model that drove the design of the Ricoh. It is a pity that the Club was run in such a way that it could never benefit from the Ricoh. When CCFC sold its share in 2003 it was expected that by 2005/6 they would have bought it back. Had this been done perhaps they would have avoided having to sell to Sisu.

 

[PWKH]

PWKH,

Have you been contacted by Gary Hoffman regarding his offer that has been in the press - do you have any personal views on this? I'm massively in favour of anything that will get us back to the Ricoh although I appreciate its highly unlikely given the entrenched positions.

I have not been contacted by Gary Hoffman and nor would I expect to be. The company was contacted. The company has not got an entrenched position and is still working hard to have the Sky Blues stay in Coventry.

 

[BrisbaneBronco]

I should have added: match day revenues are not sufficient to make any real difference to the gap between the other commercial incomes of the Club and the wages. In order to have a self-sufficient club which does not rely on pulling in money every years as loans or investments or whatever it needs to have 365 days a year income. That was the business model that drove the design of the Ricoh. It is a pity that the Club was run in such a way that it could never benefit from the Ricoh. When CCFC sold its share in 2003 it was expected that by 2005/6 they would have bought it back. Had this been done perhaps they would have avoided having to sell to Sisu.

What do u mean by this?

 

[The Penguin]

What do u mean by this?

I assume it means had we bought our share of the Ricoh back, we would have been earning half the revenue from the stadium, and consequently may have been in a far better financial position that could have prevented the threat of administration.

 

[Dhinsa's_Millions]

I have not been contacted by Gary Hoffman and nor would I expect to be. The company was contacted. The company has not got an entrenched position and is still working hard to have the Sky Blues stay in Coventry.

That's excellent news. By entrenched I meant there appears to be a stalemate when it comes to Fisher's stance and his media soundbites (he says ACL will only deal with Ltd / administrator etc) - Will ACL deal with Holdings and accept the CVA if Hoffman brokered the deal? Could that be a resolution and what you mean by 'working hard'?

 

[I'mARealWizard]

That's excellent news. By entrenched I meant there appears to be a stalemate when it comes to Fisher's stance and his media soundbites (he says ACL will only deal with Ltd / administrator etc) - Will ACL deal with Holdings and accept the CVA if Hoffman brokered the deal? Could that be a resolution and what you mean by 'working hard'?

Yes. I'm sure we're about to get that exclusive on here!

 

[SonOfSnoz]

PWKH: would you say the reason we have this mess is because the Chairman of CCFC at the time the Ricoh was being set up, was more interested in his own personal gain as his company kitted out the Ricoh seating?

 

[PWKH]

PEL, which had been McGinnity's company did not win the contract for the seating from Laing O'Rourke. Couldn't meet the specification or price, I believe.

 

[SonOfSnoz]

Thanks for clearing that up!

 

[AJB1983]

I should have added: match day revenues are not sufficient to make any real difference to the gap between the other commercial incomes of the Club and the wages. In order to have a self-sufficient club which does not rely on pulling in money every years as loans or investments or whatever it needs to have 365 days a year income. That was the business model that drove the design of the Ricoh. It is a pity that the Club was run in such a way that it could never benefit from the Ricoh. When CCFC sold its share in 2003 it was expected that by 2005/6 they would have bought it back. Had this been done perhaps they would have avoided having to sell to Sisu.

This is something i keep saying to people, these matchday revenues that Fisher keeps harping on about getting access to will not make much difference.
They equate to roughly equivalent of 1 maybe 2 League One standard players salaries - hardly the difference between being in the red, perhaps depending on the quaity of the player the difference in competing in league one or not.
Revenues at a smaller, tin-pot stadium (that i would not even entertain i'd like to add) they will build that not many people would attend would be even less.

 

[BrisbaneBronco]

Matchday revenue from FB would be massive. If everyone attending a game spent 10 quid on a pie and a pint and the average attendance was 10k x 23 games, that equates to 2.3million /season minimum

 

[RPHunt]

Matchday revenue from FB would be massive. If everyone attending a game spent 10 quid on a pie and a pint and the average attendance was 10k x 23 games, that equates to 2.3million /season minimum

As you are in fantasy land why stop there - how about everyone buying a lobster salad and a bottle of Dom Perignon and spending £200 a head?

 

[James Smith]

Matchday revenue from FB would be massive. If everyone attending a game spent 10 quid on a pie and a pint and the average attendance was 10k x 23 games, that equates to 2.3million /season minimum

That's a big stretch though, not everyone will spend that much and an average is probably £3-£4 per head per match.

 

[I'mARealWizard]

Matchday revenue from FB would be massive. If everyone attending a game spent 10 quid on a pie and a pint and the average attendance was 10k x 23 games, that equates to 2.3million /season minimum

Come on. You don't always come across as a QLD redneck, so don't play the part now...

Turnover is very different to profit.

 

[Jack Griffin]

Matchday revenue from FB would be massive. If everyone attending a game spent 10 quid on a pie and a pint and the average attendance was 10k x 23 games, that equates to 2.3million /season minimum

No it isn't like that, they couldn't possibly serve everyone could they, the 1/2 time queues never get served before the whistle goes!

At the recent fans forums Fisher quoted his experiences at Charlton as a model, there F&B had a £1.8M turnover and generated approx 720K profit from a 15,600 average crowd.

Project that into Coventry City with last years 10,800 crowd at the same profit margin and there is perhaps 500K profit in it, but in actual fact it is less than that as the Ricoh matchday turnover is at a significantly lower level than Charltons, and if you do the maths based on the real turnover then the £500K falls to more like £350K. So the realistic boundaries of F&B profit are £450K to £300K and in any case ACL is projecting the club can have £100K, the gap is narrowing to £300K.

It makes a difference sure, but losing 1500 crowd makes a much bigger difference, something like £550K p.a.

Charltons F&B alleged £1.8M turnover with 40% margin was achieved with crowds averaging over 15,600 and at London prices (no doubt the staff there are paid no more than minimum wage so the profit potential is greater). The basic information is here, http://swissramble.blogspot.co.uk/2011/11/charlton-athletic-into-valley.html

City's crowds in D3 were 10,700, the sales were c. £0.8M, so even if the margin was doubled the total profit would be £320K... but the loss of 1000 tickets on the gate at £20 for 24 matches is worth over £500K.

 

[BrisbaneBronco]

Well guys, whatever it is, its significant enough for certain parties not to want to lose. Also, if you want to buy in and get a share of this revenue, it does not come cheap.

 

[Samo]

Well guys, whatever it is, its significant enough for certain parties not to want to lose. Also, if you want to buy in and get a share of this revenue, it does not come cheap.

Or... It's not the real issue at all!

 

[StevieM]

My ACL neighbour told us that they make about £22,000 per home game which isn't a fat lot.
I would say on that sort of figure only half of the crowd are spending any cash if you look at about £3-£5 per spend.
The stadium hardly empties at half time does it?
Not many around where I sit go and buy anything, it's too feckin' expensive.
The biggest rush comes at the end of game for the "pie sale for a quid", we are all a bunch of tight bastards who like a bargain!!

 

[BrisbaneBronco]

Or... It's not the real issue at all!

Agree its not the real issue, nevertheless it is an issue.

 

[Samo]

Agree its not the real issue, nevertheless it is an issue.

Agree it's an issue, but not a deal stopper.

 

[Jack Griffin]

My ACL neighbour told us that they make about £22,000 per home game which isn't a fat lot.
I would say on that sort of figure only half of the crowd are spending any cash if you look at about £3-£5 per spend.
The stadium hardly empties at half time does it?
Not many around where I sit go and buy anything, it's too feckin' expensive.
The biggest rush comes at the end of game for the "pie sale for a quid", we are all a bunch of tight bastards who like a bargain!!

I think £22K/game must be a turnover figure, not profit.. I based my sums on the published ACL accounts which show matchday turnover as 800K p.a. or about £32K/game, well maybe that figure is F&B + other stuff.. which could account for the difference.

 

[James Smith]

I think £22K/game must be a turnover figure, not profit.. I based my sums on the published ACL accounts which show matchday turnover as 800K p.a. or about £32K/game, well maybe that figure is F&B + other stuff.. which could account for the difference.

Parking?